RE:NEWS HALT COMING LIKELY ON $24 MILLION Tonopah, Nevada SALETHIS IS THE AUGUST 1 2019 NEWS:
CROP ANNOUNCES SIGNING OF COMMERCIAL REAL ESTATE PURCHASE AGREEMENT BY ELITE VENTURES FOR TONOPAH, NEVADA PROPERTY FOR GROSS USD $24.0 MILLION
August 1st, 2019 – VANCOUVER – CROP Infrastructure Corp. (CSE: CROP) (OTC: CRXPF) (Frankfurt: 2FR) (“CROP” or the “Company”), announces that Elite Ventures Group LLC (“Elite”), a limited liability company organized and existing under the laws of the State of Nevada in which the Company holds a 49% membership interest, has entered into two commercial real estate purchase agreement (the “Property Purchase Agreement”) with Trinity Global Investments LLC (“Trinity Global”) dated July 15, 2019, pursuant to which Trinity Global has agreed to purchase certain real property located in Tonopah, Nevada (together, the “Nevada Property”) owned by Elite.
The Nevada Property will be sold together with all buildings, improvements, and fixtures constructed or located on the property, in addition to 50 acre-feet of ground water rights, the assignment of a certain Nevada energy agreement along with any costs associated therewith, and the right to use the Licenses (as defined below) on the Nevada Property (together with the Nevada Property, the “Elite Assets”) for a gross aggregate purchase price of USD$6,200,000 (the “Property Purchase Price”).
In connection with the sale of the Nevada Assets, The Hempire Company L.L.C. (“Hempire”), a limited liability company organized and existing under the laws of the State of Nevada, has agreed to sell four active, authenticated, usable, uninhibited and transferrable Nevada Marijuana Certificates (the “Licenses” and, together with the Elite Assets, the “Nevada Assets”) owned by Hempire to Trinity Global pursuant to the terms of an asset purchase agreement (the “Asset Purchase Agreement”) dated July 15, 2019 in consideration for USD$17,800,000 (the “License Purchase Price”). Pursuant to the terms of a Nevada cannabis license option agreement dated April 17, 2019 between Hempire and Elite, Hempire granted Elite with an option to acquire 100% of the Licenses, at any time prior to April 17, 2050, for USD$10,000.
In consideration for the purchase of the Nevada Assets, Trinity Global has agreed to pay an aggregate cash sum of USD$24,000,000 (which amount represents the aggregated sum of the Property Purchase Price and the License Purchase Price) as follows: • an aggregate of USD$50,000 payable on or before July 26, 2019 (the “Property Deposit”), which Property Deposit shall entitle Trinity Global to a due diligence period ending August 6th (the “Due Diligence Period”);
• USD$950,000 payable on or before July 26, 2019 (the “License Deposit”), which License Deposit shall become non-refundable and applied to the License Purchase Price at the expiration of the Due Diligence Period; and
• USD$23,000,000 payable upon the closing of the Property Purchase Agreement and the Asset Purchase Agreement (the “Closing”), which Closing is expected to occur on or before August 9th, 2019, provided there are no unforeseen delays.
In connection with the sale of the Nevada Assets, Elite and Hempire have entered into a separate disbursement agreement dated July 15, 2019, pursuant to which CROP will benefit from a combined USD$16,163,464.60 (CAD$21,251,723) directly from the sale of the Nevada Assets and indirectly through the repayment of certain debts accrued in connection therewith. Accordingly, USD$8,301,352.27 (CAD10,914,617) will be sent directly to CROP’s account as reimbursement for certain upgrades to the Nevada Property paid for by CROP, for interest payments made to date by CROP to service the initial loan used to purchase the Nevada Property and for its 49% share of the net profits. Furthermore, USD$7,862,112.34 (CAD$10,337,105) will be directly paid to certain creditors to the Nevada Property including an aggregate of CAD$5,250,000 to the certain holders of convertible debentures of the Company as well as USD$3,399,344.49 to the holder of a 20 year note issued in connection with the Nevada Property and with. The balance of the proceeds from the sale of the Nevada Assets will be paid to remaining members of Elite in amounts proportional to each member’s equity stake. All exchange rates based on the Bank of Canada exchange rate dated July 31, 2019.
Closing is subject to a number of conditions, including but not limited to, completion of satisfactory due diligence by Trinity Global, receipt of the requisite state and local governing authority approvals, and other customary closing conditions normal for a transaction of this nature.
Michael Yorke, CEO stated “The sale of the Esmerelda THC property will be bittersweet for the Company. We used a combination of long-term mortgages and convertible debt to finance the project making this an attractive return on investment for CROP and its stakeholders. The sale of the Nevada project will clean up our balance sheet as well as provide capital to vertically integrate, hire additional personnel, and focus on the four states the Company remains present.”